Key negotiation phase between PFY enterprises and downstream mills

Around the Chinese New Year period, the price trend of polyester filament yarn was stronger than that of upstream raw materials, leading to expanded profitability. However, after inventory pressures started to rise in March, the price of filament yarn gradually weakened. Despite a brief rebound in early April, recent prices have fallen again, with some transactions done at the low levels seen at the end of March.

As of now, the weighted inventory of polyester filament yarn rose to around 26 days with high supply and demand coupled with weak speculative demand downstream. The May Day holiday is approaching. The filament yarn enterprises have a stronger desire to sell goods and are closely monitoring price changes. However, current prices for polyester filament yarn, especially for regular POY, are already in a loss-making situation, so there is limited downward room in the short term.

Meanwhile, downstream raw material stocking levels have also dropped to their lowest levels of the year. As of last Thursday, the raw material stocking was only around one week, with replenishment expected by the end of April.

 Feedstock of polyester downstream plants

In the background of high crude oil prices, the current period is a crucial phase for negotiation between polyester filament yarn enterprises and downstream mills. While filament yarn inventory is relatively high, major producers are increasingly inclined to jointly support prices due to losses. With downstream raw material inventories gradually being depleted, we anticipate a probable rebound in filament yarn sales in the last few days of the month. However, given the current lack of market confidence and insufficient positive factors, the strength of the sales recovery remains to be seen.